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Here's Why We Think United Polyfab Gujarat (NSE:UNITEDPOLY) Might Deserve Your Attention Today

Simply Wall St · 06/11 00:02

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like United Polyfab Gujarat (NSE:UNITEDPOLY), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

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United Polyfab Gujarat's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Impressively, United Polyfab Gujarat has grown EPS by 27% per year, compound, in the last three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Unfortunately, United Polyfab Gujarat's revenue dropped 24% last year, but the silver lining is that EBIT margins improved from 2.0% to 4.2%. While not disastrous, these figures could be better.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

earnings-and-revenue-history
NSEI:UNITEDPOLY Earnings and Revenue History June 11th 2025

Check out our latest analysis for United Polyfab Gujarat

Since United Polyfab Gujarat is no giant, with a market capitalisation of ₹4.2b, you should definitely check its cash and debt before getting too excited about its prospects.

Are United Polyfab Gujarat Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

The first bit of good news is that no United Polyfab Gujarat insiders reported share sales in the last twelve months. But the really good news is that Chairman of the Board & MD Gagan Mittal spent ₹40m buying stock, at an average price of around ₹14.30. It seems at least one insider thinks that the company is doing well - and they are backing that view with cash.

These recent buys aren't the only encouraging sign for shareholders, as a look at the shareholder registry for United Polyfab Gujarat will reveal that insiders own a significant piece of the pie. In fact, they own 36% of the shares, making insiders a very influential shareholder group. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. To give you an idea, the value of insiders' holdings in the business are valued at ₹1.5b at the current share price. That should be more than enough to keep them focussed on creating shareholder value!

While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. That's because on our analysis the CEO, Gagan Mittal, is paid less than the median for similar sized companies. Our analysis has discovered that the median total compensation for the CEOs of companies like United Polyfab Gujarat with market caps under ₹17b is about ₹3.6m.

The CEO of United Polyfab Gujarat was paid just ₹1.8m in total compensation for the year ending March 2024. This could be considered a token amount, and indicates that the company does not need to use payment to motivate the CEO - that is often a good sign. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.

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Should You Add United Polyfab Gujarat To Your Watchlist?

For growth investors, United Polyfab Gujarat's raw rate of earnings growth is a beacon in the night. Better still, insiders own a large chunk of the company and one has even been buying more shares. So it's fair to say that this stock may well deserve a spot on your watchlist. Even so, be aware that United Polyfab Gujarat is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

There are plenty of other companies that have insiders buying up shares. So if you like the sound of United Polyfab Gujarat, you'll probably love this curated collection of companies in IN that have an attractive valuation alongside insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.